Making Globalization Work

Just about every major gathering of world leaders draws determined, often violent, protests against globalization. If you wonder why, Joseph E. Stiglitz's book explains the ample reasons. The Nobel Prize-winning economist follows up his 2002 book, Globalization and Its Discontents, with further analysis of pressing economic, political and environmental concerns, and the conflicts they engender between developing and developed countries.

He doesn't just dwell on the dreadful problems, which he outlines in knowledgeable detail. He also offers remedies and reforms, though some seem quite idealistic for a notable economist who sees so clearly what has gone wrong. His book is densely packed with data, case studies and facts, but Stiglitz intersperses this drier material with thoughtful asides on the questions of morality and equity that globalization must answer. getAbstract finds the book an enlightening read about the challenges and consequences of globalization on humankind's one and only planet.

What's Wrong with Globalization?
Finding fault with the concept of globalization isn't hard. In broad terms, it connotes the free-flowing, cross-border exchange of information and technology, business and trade, and cultural and social traditions; a cavalcade of knowledge and resources that promises greater happiness and prosperity for everyone, particularly in the developing world. But many people now wonder if globalization, given its economic goal of facilitating trade and commerce, has really improved people's lives or if it has reneged on its vows. In fact, the way globalization has rolled out so far has impelled many people to take to the streets, literally: major protests in Seattle in 1999 coalesced into a growing resistance to globalization, its unintended consequences and the heavy-handed way the West has imposed its power on developing nations. At the core, "the problem is not with globalization itself, but in the way globalization has been managed."

Many of those affected by globalization--American workers who've lost jobs to laborers in low-wage countries, developing-world farmers whose produce can't compete against subsidized Western crops, health care advocates who fight skyrocketing drug prices, indigenous peoples who struggle to maintain their natural resources and cultures--agree that its touted benefits have not materialized. Their issues revolve around five points:

1. Rich nations established "the rules of the game" to their advantage, so much so that the poorest nations may be "worse off" than they were before globalization's advance.

3. In some cases, globalization has "undermined democracy," and has constrained developing nations' sovereignty and their ability to decide their own fate.

4. Globalization's negative results harm people in developing and developed countries.

5. The imposition of Western practices, including the "Americanization" of economies and cultures, has led to bitterness and hostility.

Reform
The areas that must be reformed to make globalization work fall into six categories:

1. Poverty. In 2006, more than 2.5 billion people subsisted "on less than $2 a day," 36 percent more than in 1981. Allowing trade and capital to flow across borders is not enough to reduce poverty; the situation calls for more developmental aid and better, more evenhanded trade policies.

2. Aid and debt relief. In 2006, developing nations' debt reached about $1.5 trillion. In some countries, debt service is 50 percent or more of government spending or foreign currency earnings, money these nations could expend on building infrastructure or services. Recognizing this burden, industrialized nations now offer more aid as grants, not loans...